April is Financial Literacy Month, so this is a great time to look at your finances to make sure you’re on the right track. Here are few tips to do just that.
Write down your financial goals. If you’ve never put down your goals in writing before, try it! It can help you develop a pathway to a better financial future. Some goals to consider: creating an emergency fund; paying off debt; saving for a dream vacation; saving for education; and saving for retirement.
Create a budget. Financial experts say creating a budget helps keep your finances under control—and to fulfill your financial goals. So, how much money do you take in? How much money do you spend? How can you adjust? Make sure to create some wiggle room in your budget for unexpected expenses.
Save up. Consider an automatic deposit plan so that you can save a certain amount of money each payday. Ponder using the 50/30/20 rule—spending 50 percent of your after-tax income for needs; 30 percent for wants; and 20 percent for savings such as an emergency fund.
Pay off debt. Financial experts have various tips on how people can pay off debt faster. One group says to first pay off the most expensive debt, so it frees up money to tackle the rest. Another group of experts encourage to first pay off the debt with the highest interest first—so you’re not wasting money on interest fees. And still another group advises paying off the smallest debt first, so it gives you a sense of accomplishment and helps you keep on. Each way works. Find out which one works best for you, your situation, and your personality. One thing all experts agree on: while you’re paying off debt, try not to add to it.
Comparison shop—for everything! Doing this on things—ranging from cars and mortgages to clothing and personal care—can save you thousands of dollars.
Increase your earnings. The quickest way is to ask for a raise. But if you feel you can’t do that (due to nervousness or the company’s financial situation), then consider starting a side business or freelancing. Also, think about exploring new job opportunities or learning new skills that could increase your potential.
Review your insurance coverage. Insurance experts advise checking your insurance policies annually. You might qualify for discounts if you’ve made any renovations or upgrades to your home. Or, conversely, you might have a gap in coverage due to an increase in value of your house. If you’ve gotten married or had a child, it might be a good idea to review your life insurance policies.